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📋 '''Statement of account''' is a periodic financial document exchanged between parties in an insurance or [[Definition:Reinsurance | reinsurance]] relationship that summarizes the premiums owed, [[Definition:Claim | claims]] paid, [[Definition:Commission | commissions]] deducted, and the resulting net balance due from one party to the other. In the [[Definition:Lloyd's | Lloyd's]] market, between [[Definition:Coverholder | coverholders]] and [[Definition:Managing agent | managing agents]], and across global [[Definition:Treaty reinsurance | treaty reinsurance]] arrangements, the statement of account serves as the primary instrument for reconciling financial obligations over a defined reporting period — typically monthly or quarterly. It is sometimes referred to as a "bordereau settlement" or simply a "technical account," though its exact format and naming conventions vary by market and contractual arrangement.

🔄 The mechanics are straightforward but demand precision. The party with [[Definition:Delegated underwriting authority (DUA) | delegated authority]] or ceding responsibility compiles a statement showing gross [[Definition:Premium | premiums]] collected or due during the period, subtracts agreed [[Definition:Brokerage | brokerage]] or commission percentages and any claims or [[Definition:Loss adjustment expense (LAE) | loss adjustment expenses]] already settled, and presents the net figure payable to or receivable from the counterparty. In reinsurance, [[Definition:Ceding company | ceding companies]] prepare statements for their reinsurers reflecting ceded premiums net of ceding commissions and any paid [[Definition:Claim recovery | recoveries]]. [[Definition:Binding authority agreement | Binding authority agreements]] and reinsurance treaties typically prescribe the format, frequency, currency, and submission deadlines for these statements. Increasingly, platforms built by [[Definition:Insurtech | insurtech]] firms and market infrastructure providers like the Lloyd's [[Definition:London market | London market]]'s PPL or central settlement systems aim to automate the generation and reconciliation of statements of account to reduce errors and accelerate cash flow.

💰 Accurate and timely statements of account underpin the financial health of insurance relationships and the broader market's cash-flow cycle. Delays or discrepancies in account rendering can cascade into [[Definition:Credit risk | credit risk]] issues, regulatory reporting problems, and strained commercial relationships. Regulators in multiple jurisdictions — including the UK's [[Definition:Financial Conduct Authority (FCA) | FCA]] and the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] in the United States — expect that intermediaries and carriers maintain auditable records of account settlements. For reinsurers, timely receipt of statements is essential to booking accurate [[Definition:Reserves | reserves]] and recognizing [[Definition:Earned premium | earned premium]] under both [[Definition:International Financial Reporting Standard 17 (IFRS 17) | IFRS 17]] and [[Definition:US GAAP | US GAAP]]. In a market where billions of dollars move between counterparties every quarter, the humble statement of account is a linchpin of operational discipline.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Bordereau]]
* [[Definition:Premium accounting]]
* [[Definition:Binding authority agreement]]
* [[Definition:Ceding commission]]
* [[Definition:Settlement (insurance)]]
* [[Definition:Technical account]]
{{Div col end}}

Definition:Statement of account - Revision history

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